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Motilal Oswal Report
HDFC Life Insurance Company Ltd. remains focused on maintaining a balanced product mix, with an emphasis on product innovation and superior customer service.
Growth in lower tier cities will be the key focus areas with expansion of HDFC Bank's branch network and deepening of HDFC Life's branch network. Persistency trend improved across cohorts and this is expected to sustain healthy growth in renewal premiums.
The company's guidance for premium growth in the private life insurance industry stands at 12-15%. It aims to grow at the higher end of this range while maintaining value of new business margins. We have cut our annual premium equivalent growth and VNB margins assumptions based on Q4 FY24 performance and the guidance.
We now estimate HDFC Life to deliver ~16% VNB compound annual growth rate over FY24-26 and margin to be steady in the range of 26-27%.
We reiterate our Neutral rating on the stock with a target price of Rs 670 (premised on 2.3 times March-26E embedded value).
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